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Income Taxes
 6 Months Ended
Jun. 30, 2023
Income Tax Disclosure [Abstract]  
Income Taxes
20. Income Taxes
Effective Income Tax Rate – Three and Six Months Ended June 30, 2
023
T
he Company’s effective income tax rate during the three months ended June 30, 2023 was 6.1%, resulting in income tax expense of $3,555. The effective income tax rate differs from the federal statutory tax rate of 21% primarily due to a
non-taxable
gain on revaluation/termination of deferred consideration—gold payments and a decrease in the deferred tax asset valuation allowance on losses recognized on the Company’s investments. These items were partly offset by
non-deductible
executive compensation.
The Comp
any’s effective income tax rate during the six months ended June 30, 2023 of 6.5%, resulting in income tax expense of $4,938. The effective income tax rate differs from the federal statutory tax rate of 21% primarily due to a
non-taxable
gain on revaluation/termination of deferred consideration—gold payments, a $1,353 reduction in unrecognized tax benefits (including interest and penalties) and a lower tax rate on foreign earnings. These items were partly offset by a
non-deductible
loss on extinguishment of our convertible notes,
non-deductible
executive compensation and an increase in the deferred tax asset valuation allowance on losses recognized on our investments.
Effective Income Tax Rate – Three and Six Months Ended June 30, 2022
Th
e Company’s effective income tax rate during the three months ended June 30, 2022 of 25.0% resulted in income tax expense of $2,673. The effective income tax rate differs from the federal statutory tax rate of 21% primarily due a valuation allowance on losses recognized on securities owned and
non-deductible
executive compensation. These items were partly offset by a
non-taxable
gain on revaluation of deferred consideration—gold payments and a lower tax rate on foreign earnings.
The Compan
y’s effective income tax rate benefit during the six months ended June 30, 2022 of 86.2% resulted in an income tax benefit of $14,040. The Company’s effective income tax rate differs from the federal statutory tax rate of 21% primarily due to a $19,897 reduction in unrecognized tax benefits (including interest and penalties) and a lower tax rate on foreign earnings. These items were partly offset by a
non-taxable
loss on revaluation of deferred consideration—gold payments and an increase in the deferred tax asset valuation allowance on losses recognized on financial instruments owned.
Deferred Tax Assets
A summary of the components of the Company’s deferred tax assets at June 30, 2023 and December 31, 2022 is as follows:
 
     
                  
      
                  
 
  
June 30,

2023
 
  
December 31,
2022
Deferred tax assets:
  
      
  
    
Capital losses
    $ 19,061      $ 17,541
Unrealized losses
      3,054        3,821
Accrued expenses
      2,669        6,030
NOLs—Foreign
      1,583        1,609
Stock-based compensation
      1,289        1,526
Interest carryforwards
      1,209        —
Goodwill and intangible assets
      990        1,085
Operating lease liabilities
      206        313
Foreign currency translation adjustment
      184        173
NOLs—U.S.
      127        255
Outside basis differences
      122        122
Other
      362        341
    
 
 
     
 
 
Deferred tax assets
      30,856          32,816
    
 
 
     
 
 
 
                                     
    
June 30,

2023
     
December 31,
2022
  
Deferred tax liabilities:
      
Fixed assets and prepaid assets
   
 
577  
 
   
 
278  
 
Unremitted earnings—European subsidiaries
   
 
210  
 
   
 
205  
 
Right of use assets—operating leases
   
 
206  
 
   
 
313  
 
  
 
 
     
 
 
  
Deferred tax liabilities
   
 
993  
 
   
 
796  
 
  
 
 
     
 
 
  
Total deferred tax assets less deferred tax liabilities
   
 
29,863  
 
   
 
32,020  
 
Less: Valuation allowance
   
 
(22,237) 
 
   
 
(21,484) 
 
  
 
 
     
 
 
  
Deferred tax assets, net
   
 
$    7,626  
 
   
 
$  10,536  
 
  
 
 
     
 
 
  
Capital Losses – U.S.
The Company’s tax effected capital losses at June 30, 2023 were $
19,061
. These capital losses expire between the years 2023 and 2028.
Net Operating Losses – Europe
One of the Company’s European subsidiaries generated NOLs outside the U.S. These tax effected NOLs, all of which are carried forward indefinitely, were $
1,583
at June 30, 2023.
Valuation Allowance
The Company’s valuation allowance has been established on its net capital losses, unrealized losses and outside basis differences, as it is
more-likely-than-not
that these deferred tax assets will not be realized.
Income Tax Examinations
The Company is subject to U.S. federal income tax as well as income tax of multiple state, local and certain foreign jurisdictions. As of June 30, 2023, with few exceptions, the Company was no longer subject to income tax examinations by any taxing authority for the years before 2018.
Undistributed Earnings of Foreign Subsidiaries
ASC
7
40-30
Income Taxes provides guidance that U.S. companies do not need to recognize tax effects on foreign earnings that are indefinitely reinvested. The Company repatriates earnings of its foreign subsidiaries and therefore has recognized a deferred tax liability of $210 and $205 at June 30, 2023 and December 31, 2022, respectively.